The Role of Investment-Specific Technological Change in the Business Cycle

This is a specific investigation of the importance of technological change specific to new investment goods for postwar U.S. aggregate fluctuations. A growth model that incorporates this form of technological change is calibrated to U.S. data and simulated, using the relative price of new equipment to identify the process driving investment-specific technology shocks. The analysis suggests that this form of technological change is the source of about 30 percent output fluctuations.

[1]  Robert J. Gordon,et al.  The measurement of durable goods prices , 1991 .

[2]  Per Krusell,et al.  Long-Run Implications of Investment-Specific Technological Change , 1995 .

[3]  Per Krusell,et al.  Can Technology Improvements Cause Productivity Slowdowns? , 1996, NBER Macroeconomics Annual.

[4]  Mary G. Finn,et al.  Variance Properties of Solow's Productivity Residual and Their Cyclical Implications , 1994 .

[5]  Jeremy Greenwood,et al.  Investment, Capacity Utilization and the Real Business Cycle , 1988 .

[6]  Mark A. Wynne,et al.  The role of intratemporal adjustment costs in a multisector economy , 1999 .

[7]  Andreas Hornstein,et al.  Intermediate Inputs and Sectoral Comovement in the Business Cycle , 1997 .

[8]  Finn E. Kydland,et al.  The workweek of capital and its cyclical implications , 1986 .

[9]  Martin Eichenbaum,et al.  Factor Hoarding and the Propagation of Business Cycles Shocks , 1994 .

[10]  Finn E. Kydland,et al.  Time to Build and Aggregate Fluctuations , 1982 .

[11]  Richard Rogerson,et al.  Indivisible labor, lotteries and equilibrium , 1988 .

[12]  R. Lucas.  Capacity, Overtime, and Empirical Production Functions , 1970 .

[13]  Warren Bower.  New directions , 1937 .

[14]  Randall Wright,et al.  Homework in Macroeconomics: Household Production and Aggregate Fluctuations , 1991, Journal of Political Economy.

[15]  Lawrence J. Christiano,et al.  Tobin&Apos;S Q and Asset Returns: Implications for Business Cycle Analysis , 1995 .

[16]  C. Evans.  Productivity shocks and real business cycles , 1992 .

[17]  G. Hansen.  Indivisible Labor and the Business Cycle , 1985 .

[18]  E. Prescott.  Theory ahead of business-cycle measurement , 1986 .

[19]  M. Bils,et al.  Cyclical factor utilization , 1994 .

[20]  Charles I. Plosser,et al.  Growth and Business Cycles I. The Basic Neoclassical Model , 1988 .

[21]  R. Lucas,et al.  SUPPLY-SIDE ECONOMICS: AN ANALYTICAL REVIEW , 1990 .

[22]  Thomas F. Cooley,et al.  Equilibrium business cycles with idle resources and variable capacity utilization , 1995 .